Florida Investor Loses $860,000 in Cryptocurrency Scam

A Florida investor has filed a lawsuit against a Denver-based trading school and a fraudulent cryptocurrency exchange, alleging that he was defrauded out of $860,000. The plaintiff, Brian Firestone, claims that the Alpha Stock Investment Training Center (ASITC), operating out of downtown Denver, collaborated with a fake exchange named CoinBridge Partners to execute the scheme.

Firestone's involvement began in December when he was approached by an individual named John Smith, who purportedly represented ASITC. Smith offered to teach Firestone cryptocurrency trading and provided him with an initial $500 to start. The trading school's website, which is now defunct, listed its address at 1660 Lincoln St. and directed users to trade through CoinBridge, which falsely claimed to have raised $10 million from 600 investors. Firestone alleges that CoinBridge is entirely fake.

The lawsuit details that ASITC employed a method known as signal trading, where "professors" would send participants specific trade instructions at designated times. Firestone followed these instructions and executed trades via his CoinBridge account. His initial investment of $500 quickly grew to $55,000, prompting him to invest an additional $50,000 in January. Within weeks, his balance reportedly showed $2 million. Firestone expressed his gratitude to Smith, stating that his results were outstanding.

However, the situation took a turn for the worse when a losing trade reduced his balance to $12,000. Firestone then wired $470,000 in cash and took out a $330,000 loan from ASITC to continue trading. His CoinBridge account allegedly jumped to $24.5 million, but a trade in USDT on March 9 failed to execute, erasing his balance due to a purported "system error." Firestone was unable to close the trade and was told that a glitch had caused the issue.

Two days later, Firestone borrowed an additional $1 million from ASITC, bringing his account to $6.6 million. However, when he was unable to repay part of the loan, ASITC allegedly shut down his account on May 1. The lawsuit accuses ASITC, CoinBridge, Smith, and founder Raymond Torres of fraud, theft, and racketeering. The legitimate Coinbridge Partners in Wyoming has denied any connection to the alleged scam.

This case highlights the growing trend of fraudulent activities in the cryptocurrency space, where unsuspecting investors are lured by promises of high returns and sophisticated trading strategies. The use of signal trading and fake exchanges is a common tactic employed by scammers to deceive investors and siphon off their funds. The lawsuit filed by Firestone serves as a reminder of the importance of due diligence and caution when engaging in cryptocurrency trading, especially with entities that promise unrealistic returns.

The allegations in the lawsuit paint a picture of a well-orchestrated scheme designed to exploit the trust and greed of investors. The initial success experienced by Firestone, with his investment growing from $500 to $2 million in a short period, is a classic example of how scammers hook their victims. The subsequent loss of funds due to a "system error" and the inability to close trades further illustrate the manipulative tactics used to keep investors engaged and investing more money.

The shutdown of Firestone's account after he failed to repay part of the loan suggests that the scammers were not only interested in stealing his initial investment but also in extracting as much money as possible from him. The lawsuit's accusations of fraud, theft, and racketeering underscore the seriousness of the allegations and the potential legal consequences for those involved.

The denial of any connection to the alleged scam by the legitimate Coinbridge Partners in Wyoming adds another layer of complexity to the case. It raises questions about the extent of the fraud and the potential involvement of other entities in the scheme. The outcome of the lawsuit will likely have implications for the broader cryptocurrency industry, as it seeks to address the growing problem of fraud and deception in the space.